Here are the latest developments in global markets:
FOREX: Better than expected employment readings and growing hopes of a softer Brexit pushed pound/dollar to 1.4151 (+1.04%) during early European trading hours and led euro/pound down to a 5-week low of 0.8746 (-0.75%). Euro/dollar edged up to fresh 3-year highs at 1.2355 (+0.28%) after Eurozone’s Markit composite PMI surprisingly hit a new all-time high. On the other hand, dollar/yen extended losses towards a 4 ½-month low of 109.36 and the dollar index touched a 3-year trough at 89.70 following comments by the US Secretary Steven Mnuchin who said that a weaker dollar is attractive for trade purposes. Aussie/dollar and kiwi dollar were among the best performers, trading at 4-month highs, while Swedish krona/dollar gained ground after the Swedish central bank, the Riksbank, said that it might start raising interest rates before the ECB.
STOCKS: A drag in utilities and techs erased part of gains in energy stocks. However, European indices continued to trade at 2 ½-year highs amid optimism on the region’s economic expansion and continuing earnings growth. The pan-European STOXX 600 lost speed, trading slightly up by 0.03% at 1045 GMT after the Bank of Merrill Lynch downgraded the French waste and water group Suez to underperform from neutral, while JP Morgan cut its ratingS for AMS – Apple’s supplier – to neutral. The blue-chip Euro STOXX 50 was up by 0.23%, whereas the German DAX 30 and the UK FTSE 100 were steady. The Swiss SWI 20 jumped by 0.53%, underpinned by rising healthcare equities.
COMMODITIES: Oil prices were mixed. WTI crude climbed by 0.34% on the day to $64.66 per barrel and Brent was slightly down by 0.10% at $69.89. Gold surged by 0.64% on the back of a weaker dollar, last seen at $1,349.50 per ounce.
Day ahead: New Zealand release CPI figures; Trump heads to Davos
Later in the day, the economic calendar features the Markit flash manufacturing PMI, existing home sales and data on oil inventories out of the US, while New Zealand will report on Q4 consumer prices.
At 1445 GMT, the US manufacturing PMI for the month of January is expected to inch down from 55.1 in December to 55.0 according to IHS Markit, whilst existing home sales due at 1500 GMT are said to decline by 2.2% m/m in December for the first time after rising for three consecutive months. In November, the measure hit a 1 ½-year high at 5.6%.
A few minutes later(1530 GMT), the Energy information administration will release its weekly report on the US oil inventories, with forecasts suggesting crude oil and distillate stocks falling by a smaller amount in the week ending January 19. Gasoline inventories, though, are anticipated to continue rising at a slower pace.
New Zealand Q4 CPI figures will follow at 2145 GMT with the potential to shake the kiwi. Expectations are for inflation to slow down to 0.4% q/q compared to 0.5% in the previous quarter, while on a yearly basis the index is projected to remain flat at 1.9%, within the RBNZ’s target of 1-3.0%.
In Davos, Switzerland, the global elite continues discussions on world topics at the annual World Economic Forum for the third day. Trump administration officials are also on the way to attend the event after the US Senators on Monday managed to end the government shutdown until February 8. Investors will be eager to hear any comments by the US President as he has shown opposition to many areas of discussions including trade issues in his first year of presidency. Moreover, his first legislative achievement involving massive tax cuts for businesses and individuals has attracted global interest as the US business environment might be more profitable for foreign companies.
 during early European trading hours and led euro/pound down to a 5-week low of 0.8746 (-0.75%). Euro/dollar edged up to fresh 3-year highs at 1.2355 (+0.28%) after Eurozone's Markit composite PMI surprisingly hit a new all-time high. ){kind=link}